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Arms Trade Offsets: What Do We Know?

Author

Listed:
  • Jurgen Brauer

    (Augusta State University)

  • J Paul Dunne

    (Department of Economics, British University in Egypt and UWE, Bristol)

Abstract

This chapter is a review of our empirical knowledge regarding arms trade offsets. Extant evidence suggests that offset arrangements do not yield net benefits for a country’s economic development. As a general rule arms trade offset deals are more costly than off-the-shelf arms purchases, create little by way of new or sustainable employment, do not appear to contribute in any substantive way to general economic development, and with very few exceptions do not result in significant technology transfers, not even within the military sector. As of 2009, the United States and the European Union have taken official government positions against offset deals. Nonetheless, arms trade offsets are a flourishing practice.

Suggested Citation

  • Jurgen Brauer & J Paul Dunne, 2009. "Arms Trade Offsets: What Do We Know?," Working Papers 0910, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    • Handle: RePEc:uwe:wpaper:0910
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    File URL: http://carecon.org.uk/DPs/0910.pdf
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    Cited by:

    1. J. Paul Dunne, 2017. "War, peace, and development," Economics of Peace and Security Journal, EPS Publishing, vol. 12(2), pages 21-31, October.
    2. Larrú, José María, 2013. "The developmental contribution of the Offset Agreements: the case of Colombia," MPRA Paper 51456, University Library of Munich, Germany.
    3. Christopher Coyne, 2015. "Lobotomizing the defense brain," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(4), pages 371-396, December.
    4. Vesa Kanniainen & Juha-Matti Lehtonen, 2019. "Offset Contracts as an Insurance Device in Building the National Security," Defence and Peace Economics, Taylor & Francis Journals, vol. 30(1), pages 85-97, January.
    5. Florian Johannsen & Inmaculada Martínez-Zarzoso, "undated". "Political Determinants of the Extensive and Intensive Margins of International Arms Transfers," Ibero America Institute for Econ. Research (IAI) Discussion Papers 228, Ibero-America Institute for Economic Research.
    6. Alshamy, Yahya & Coyne, Christopher J. & Goodman, Nathan, 2023. "Noxious government markets: Evidence from the international arms trade," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 87-99.

    More about this item

    Keywords

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    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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